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Tag: Vietnam

  • Vietnam’s low-tech agriculture startups fail to interest investors

    Vietnam’s low-tech agriculture startups fail to interest investors

    Failure to incorporate market needs and hi-tech elements into their projects is costing Vietnam’s agriculture startups dear, experts say.

    Experts and other participants at the opening ceremony of the Saigon Times Startup Club recently agreed Vietnam comes up short on agricultural startups that appeal to investors.

    “Previous capital investment reports show that funds for agriculture only account for 10 percent (of total investment),” Nguyen Viet Duc, CEO of Innovation Capital Management, said.

    Explaining some of the reasons for this low investment rate, Duc said young startup companies do not satisfy the market demand and fail to factor artificial intelligence (AI) and Internet of Things (IoT) in their operations.

    Taking this analysis further, Hoang Minh Ngoc Hai, general director of Value Commerce Hub, a startup facilitator and business consultancy firm, said not many Vietnam agricultural start-up companies were attractive to Japanese investors since they only want to fund companies that carry the promise of stable output, have more than one founder, and have founders with long-term commitment.

    “We do not have many startups that meet all these factors,” Hai said.

    Commenting on the fact that there are fewer successful projects in the sector, General Director of Dong A Solutions, Tran Bang Viet, said that agricultural startups face more challenges than those in other sectors.

    “Launching an agriculture startup is tough, time consuming, expensive and very complicated,” he said. “Not to mention quality products getting mixed up with bad and fake ones. The money that has to be spent on gaining customers’ trust is very high,” he said.

    However, Viet also felt that agriculture, education and health are promising sectors for startups, because there are longstanding problems that can be tackled with innovative solutions.

    Prime Minister Nguyen Xuan Phuc last month called for a drastic reduction in administrative procedures and easier access to agricultural loans.

    Phuc said he wanted Vietnam to be listed among the top 10 countries in agricultural production and for the nation’s agriculture sector to rank 15th in the world.

    Vietnam is currently ranked second in Southeast Asia and 13th in the world in agriculture production, according to Minister of Agriculture and Rural Development, Nguyen Xuan Cuong.

    Vietnam exported about $36.37 billion worth of agriculture and fisheries products last year.

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  • Grab partners with Vietnamese firm for payment service

    Grab partners with Vietnamese firm for payment service

    Grab announced on Tuesday its partnership with Vietnam’s MOCA Technology and Service company (Moca) for a mobile payment service in Vietnam.

    The ride-hailing firm pushes to cement its position in the Southeast Asian country. Grab has made digital payments and financial services a significant part of its growth strategy in the region, where a chunk of the population remains unbanked, fuelling expectations of a boom in demand for such businesses.

    “This is a great step forward. I think the Moca team is great, their technology and solutions are great, and together with the combined expertise of our Grab team we can truly move Vietnam toward a cashless economy, ” Grab co-founder Tan Hooi Ling said on Tuesday.

    Grab, which counts Chinese ride-hailing firm Didi Chuxing and Japan’s SoftBank Group Corp among its backers, is the most prominent player in Vietnam after it pushed out Uber in a deal that saw the latter exiting Southeast Asia.

    “This strategic collaboration with Moca marks an important milestone for Grab in Vietnam as we seek to accelerate our growth in one of the fastest growing economies in Southeast Asia, ” said Nguyen Tuan Anh, head of Grab Financial Group Vietnam.

    The companies did not give further details of the partnership, but said they expect to launch their joint service in October.

    Moca was granted a license for payment services by the State Bank of Vietnam in 2016 and has a network of 11 local banks as partners for their service, said Tran Thanh Nam, co-founder and chief executive of Moca.

    Grab said it has 175, 000 drivers and bikers across the country. Rival Indonesia’s GoJek entered Vietnam last month in a bid to grasp a share of Vietnam’s fast-growing market, which also has several other local players.

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  • Vietnam startups lack government support when it matters most

    Vietnam startups lack government support when it matters most

    Vietnamese startups do not get the financial support they need from the government at the discovery and validation stages.

    The lack of institutional support is one of major factors behind the failure of many startups to take off and thrive, experts say.

    “80-90 percent of startups fail in the early stages because they don’t have enough funding to move on to the expansion stage,” said Phan Hoang Lan, head of the Financial Planning Division under the Ministry of Science and Technology’s Market Development Department.

    Funding for startups mostly comes from venture capital funds, businesses and angel investors, not from the government, experts said at a recent conference.

    There are three periods in the development of a startup – discovery, validation and expansion, said Lan.

    It is in the first two periods that startups need funding the most, Lan said, adding that they end up raising money from family and friends or spending their own.

    This situation is very different from other countries like Singapore, where the government offers a variety of grants that can support up to 70 percent of a company’s costs.

    The U.S. News and World ranks Singapore as the 8th best country for starting a business in its 2018 Best Countries Rankings.

    Vietnam was ranked 52nd, behind other countries in Asia like Japan (2nd), South Korea (12th), Malaysia (34th), Thailand (38th) and the Philippines (45th).

    Since 2015, the government has only been investing in startups in the middle stage of their development, not in the earlier ones, said Lan, who is also the head researcher of the Vietnam-Finland Innovation Partnership Program (IPP2), which seeks to improve local support mechanisms for new innovative companies.

    “Government funding for startups should start in the early period. The government needs to be willing to accept failures in their investments, which could also bring a lot of benefits,” she said.

    IPP2 research shows that early government funding will reduce the “crowding out effects,” which is when the government’s involvement in a sector substantially affects private companies by reducing their investment spending.

    When a business has overcome the difficult period, it will no longer be dependent on the government’s capital and can source investment from other private companies.

    Echoing Lan, Nguyen Tri Hieu, an economist with over 30 years of experience working in the U.S. and Vietnam, said startups in Vietnam mostly receive funding from family and friends in their earlier stages, not from the government.

    In the U.S., startups can find financial support from the Small Business Administration (SBA), which has an annual budget approved by Congress to enable their establishment, Hieu said.

    “But this is not the case in Vietnam, where they get very limited government budget support in some cities and provinces like Hanoi, Ho Chi Minh City, Da Nang and Can Tho,” he said.

    Jouko Ahvenainen, CEO of digital finance firm Grow VC Group, affirmed the vital role of the government in supporting startups.

    The government needs to build an ecosystem to help local and international investors connect with entrepreneurs and help them expand internationally, he said.

    There should be good database of local startups so that investors can make their choices with greater ease, he added.

    The number of startups in Vietnam has seen an increasing trend in recent years, reaching 92 last year, a 45 percent increase over 2016, according to the Topica Founder Institute (TFI), which has an annual program that trains and connects startups with potential investors.

    These startups raised $291 million last year, up 42 percent from 2016, TFI said.

    Startups in Southeast Asia attracted $7.86 billion in total last year, a threefold plus increase over 2016, Tech in Asia data shows.

    Vietnam accounted for only 0.7 percent of that figure, lower than Thailand (2.2 percent), Malaysia (3.1) and Indonesia (22).

    Without government support, some potential economic development will be weakened, said economist Hieu.

    About 90 percent of Vietnamese businesses are of small and medium scale, but they create jobs for a majority of the labor force, he said.

    “The future of the economy depends on the success of startups.”

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  • Vietnam posts surprise $2.2 bln trade surplus in August

    Vietnam posts surprise $2.2 bln trade surplus in August

    Strong growth in telephone and textile exports helped Vietnam post a $2.2 billion trade surplus in August, according to customs data.

    The August surplus even surpassed Vietnam’s $2.1-billion surplus for all of last year, and was a positive signal for economic growth, which is expected to beat the government’s forecast of 6.7-percent target for 2018.

    Exports in August rose 15.6 percent from a month earlier to $23.48 billion, while imports rose 1.6 percent to $21.28 billion, the customs department said on its website.

    Exports in January-August rose 16.7 percent annually to $158.4 billion, led by shipments in smartphones, garments and electronic home appliances, and were on track to outperform the government’s full-year target for a 7-8 percent increase.

    Vietnam, the largest producer of smartphones for Samsung Electronics, shipped $45 billion worth of telephones and spare parts in the eight-month period, up 32 percent annually, easily outstripping the government’s estimate of $30.9 billion, the report showed.

    Textile, garments, electronic and computer exports also rose strongly in the first eight months with a combined value of $52 billion, also much higher than the government’s estimate of $37.9 billion, official data showed.

    Exports of steel and ingots jumped 55 percent in the eight-month period to $3.1 billion, higher than the government’s estimate of $2.9 billion.

    The United States has slapped steel import duties on steel products from Vietnam that originated in China, to deter Vietnam from being used for transhipment by China to avoid U.S. tariffs.

    Eight-month imports were up 12.4 percent at $153.7 billion, producing a trade surplus $4.69 billion, the report showed.

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  • Japan top investor in Vietnam, has interests in multiple sectors

    Japan top investor in Vietnam, has interests in multiple sectors

    Japan is the biggest foreign investor in Vietnam in terms of pledged investment capital in January-August.

    In the first eight months of this year, pledged investment from Japanese companies reached $7 billion, nearly 29 percent of the total foreign investment that came from 97 countries and territories, according to the Ministry of Planning and Investment.

    Japanese investors back multiple projects across sectors, including agriculture, consumer goods, finance, and real estate. Their investments range from millions to billions of dollars.

    For instance, Japan’s Sumitomo and Vietnam’s private firm BRG signed a deal earlier this year to develop a $4.14 billion smart city project in Hanoi’s Dong Anh District.

    They hope to commence work on the first phase of the 272-hectares project late this year.

    Up to 70 percent of Japanese firms in Vietnam plan to expand their business in the country, as most of them believe that revenue will continue to increase, according to a recent survey by the Japan External Trade Organization (JETRO).

    Over 65 percent of surveyed firms said they have been profitable in Vietnam.

    Japan was the fourth largest trading partner of Vietnam last year, with a total turnover of almost $34 billion, up 13.8 percent from 2016, according to Vietnam Customs.

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  • Skilled staff shortage cramp Vietnam’s upscale hotels

    Skilled staff shortage cramp Vietnam’s upscale hotels

    Upscale Vietnam hotels are struggling to hire and retain skilled staff, as even those with hospitality training switch careers.

    Nguyen Huu Tho, chairman of Vietnam Tourism Association, estimated a 40 percent staff shortage in the hospitality industry.

    The hospitality industry is booming as tourist arrivals increase year after year and hotels spring up all over the country to meet rising demand.

    This also means a high demand for more staff, but hotels are struggling to find them, says Kenneth Atkinson, executive chairman of Grant Thornton Vietnam, market research firm.

    HotelJob.vn, one of the leading hospitality search services, is currently inviting applications for over 9,500 jobs, from janitors to managers.

    In tourism hotspots like Phu Quoc Island and Sapa, hotels are unable to get the staff they need, he said.

    In fact, many hotels all over the country are experiencing challenges in sourcing skilled Vietnamese persons to fill vacant positions, he said, adding that the shortage often results from people not continuing to pursue a career in hospitality despite being trained in the industry.

    The shortage has resulted in strong competition between upscale hotels in travel hot spots that are having trouble retaining staff. The high labor turnover in the industry is making things very difficult for hotel managers.

    In Nha Trang, the famous beach city in central Vietnam, the CEO of 4-star Rosaka Hotel, Nguyen Anh Vu, said he had to recruit new staff every month as they switch easily to whichever hotel is offering better wages and benefits.

    “Even lowering the standard doesn’t help me to recruit enough people,” Vo said.

    Nguyen Thi Hoa Le, chairwoman of the Peace Tour Company, said that even if staff at Phu Quoc are paid salaries 1.5 times higher than the average in other areas, it is very difficult to keep them.

    Low esteem

    One of the reasons for the skilled staff shortage is that the hospitality industry in Vietnam is not an attractive career path to many.

    “Many Vietnamese people commence in hospitality and then leave for other industries,” said Craig Douglas, chairman of the HR working group under the Advisory Board for the Vietnam National Administration of Tourism.

    “In many countries around the world, young people are excited and proud to work in hotels, but this is not generally the case in Vietnam, where service industries are somehow not regarded in the same way,” he said.

    Douglas also said that there is a shortage of qualified training schools relative to the growth in staff requirement at existing and new hotels.

    The average staff per room required for upscale hotels is between 1.3 and 1.5, he said.

    That means almost 25,000 employees are needed to service all 4-star and 5-star hotels that are operating or being built in Phu Quoc alone, he added.

    But, Le said, there is only one training school for tourism on the island.

    Le said that to have enough employees in Phu Quoc, she has to recruit staff from all over the country and invite experts to come and train them.

    ASEAN employees

    When there are no Vietnamese candidates available, employers will look to other employees from ASEAN countries like the Philippines and Malaysia, who have better language skills and are more price competitive, Atkinson said.

    The Mutual Recognition Arrangements for Tourism Professionals under the ASEAN Economic Community, which was established in 2015, has made it easier for hotels to employ staff from those countries, he added.

    He said hotels have to hire good staff in all circumstances, because a lack of skilled staff will make it difficult to provide quality service to the guests, Atkinson said.

    “If guests do not get the standard of service that they require then the industry will get a bad name internationally, which will negatively impact on the flow of foreign visitors and returning visitors to Vietnam,” he added.

    Last year, there were over 68,200 upscale hotel rooms, accounting for 13.4 percent of the total, according to the Vietnam National Administration of Tourism (VNAT).

    VNAT statistics also show a significant upsurge in the number of foreign visitors to Vietnam over the last few years.

    By the end of August this year, 10.4 million foreign visitors came to the country, up 22.8 percent year-on-year.

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  • Pricing incentive for Vietnam solar power projects extended

    Pricing incentive for Vietnam solar power projects extended

    A long-awaited proposal to extend a key pricing incentive for solar power projects in Ninh Thuan Province has been approved.

    The Government has issued Resolution No. 115/NQ-CP that allows solar power projects in the central province of Ninh Thuan to enjoy a feed-in tariff (FIT) of 9.35 cents per kilowatt-hour for a period of 20 years as long as they begin commercial operations by the end of 2020.

    This is an extension of the earlier commercial operation date (COD) deadline of June 30, 2019, applying to all localities, which was set by the Prime Minister’s Decision No.11/2017/QD-TTg.

    The extension of COD for Ninh Thuan, as specified in the new resolution, will hold good until projects that were approved by the Prime Minister reach a combined capacity of 2,000MW.

    The FIT for subsequent projects has not been finalized yet.

    Ninh Thuan and Binh Thuan are central provinces that have the greatest potential for renewable energy in the country.

    The COD extension is part of a package of incentives the Government is offering Ninh Thuan to support its 2018-2023 development, based on a proposal by the Ministry of Planning and Investment (MPI).

    The MPI first submitted to the Government a COD extension proposal for Ninh Thuan in early July, but later in the month, the Government Office issued Official Letter No. 7108 stating that the deadline remains unchanged.

    The new resolution has given investors hope that the COD deadline would also be extended to other localities later this year, an industry expert said.

    FITs are payments made for supplying renewable energy to the national grid.

    Recent innovations in solar power technology that have helped bring down production costs dramatically have made Vietnam’s 9.35 cents per kilowatt hour tariff attractive to private investors.

    Hundreds of private investors have submitted proposals to set up solar farms, but the June 30, 2019 deadline was too tight, energy experts had said.

    The projects can get entangled in land acquisition hiccups, procedural lags and a lack of master zoning plans for solar power development at the national and provincial levels, they added.

    There were also concerns over infrastructure needed for the solar power projects to connect to the national grid.

    There are no definitive answers now to questions about pricing for solar power connected to the grid after the end of 2020 in Ninh Thuan and after June 30, 2019 in other provinces.

    How the FITs are decided after June 30, 2019 could depend on what technology prices will be at a specific period of time, according to the Electricity Regulatory Authority of Vietnam (ERAV).

    Meanwhile, power authorities are considering piloting auctions as an alternative option to FITs after June 2019.

    ERAV has sought World Bank assistance and hired consultants to study auction mechanisms.

    Bidders offering the lowest prices to the Electricity of Vietnam (EVN), the country’s sole power distributor, will be awarded development contracts.

    MoIT has approved around 70 solar projects with a total capacity of over 3,000 megawatts to be commissioned before June 30, 2019.

    Vietnam currently relies largely on hydropower and thermal power plants for its electricity demands, but these have drawn frequent domestic and international criticism for their social and environmental impacts.

    Solar accounts for just 0.01 percent of the power output, but the government plans to increase this ratio to 3.3 percent by 2030 and 20 percent by 2050.

    By 2030 Vietnam aims to produce 10.7 percent of its electricity from renewable sources, with wind energy being the other main option.

  • E-commerce giants rake in losses as market share war continues

    E-commerce giants rake in losses as market share war continues

    In for the long haul, online retailers are willing to ignore losses, focusing on promotions to attract more customers.

    Hoang has recently been able to buy a few electronic items online at a mere VND500,000 ($20), a fraction of what they would have cost at regular stores.

    He has been doing most of his shopping online in recent years, usually by hunting around for items sold at discounts of 50-80 percent.

    He said: “A few months ago I bought a shirt on sale for only VND5,000 (21 cents). I paid VND25,000 for shipping.”

    Customers like Hoang are the targets of Vietnam’s major e-commerce players. To attract more customers in an ultra-competitive market, these online shops are willing to spend large sums on promotions.

    In the first quarter online retailer Shopee Vietnam had around 30,000 orders a day, most of which were shipped free, according to a report by its owner SEA Ltd.

    Lazada also regularly offers discounts of up to 50 percent.

    But in this process these stores are bleeding, with Lazada, Shopee and Tiki all reporting losses.

    Lazada had an accumulated loss in 2016 of VND2.7 trillion ($115 million), the largest among online retailers in Vietnam.

    Tiki had a loss of VND600 billion ($26 million) in the same year, while Shopee reported a similar loss last year.

    SEA Ltd. said that most of the losses are due to the expenses on advertising and promotions.

    But it is a war that would go on for a long time, Truong Van Quy, CEO of marketing academy EQVN, predicted.

    To attract customers, they are willing to ignore their losses, he said, pointing out that even Amazon had to spend a large amount of money for 15 years just to attract users.

    For an online retailer to break even it first needs to have dozens of millions of customers within five to 10 years, he said.

    This was why Chinese e-commerce giant Alibaba bought Lazada last year for $2 billion, and injected another $2 billion into the company last March, he said.

    Tiki received an investment of $50 million from China’s second biggest online e-commerce firm, JD.com, earlier this year, while Shopee injected another VND1.2 trillion ($51 million) into its business, he added.

    Industry insiders said the sector has huge potential with the expanding middle class and smartphone usage.

    The World Bank has forecast that Vietnam’s $200-billion economy is likely to grow to a trillion dollars by 2035.

    More than half of its population, compared to only 11 percent today, is expected to join the ranks of the global middle class with consumption of $15 a day or more.

    Across the country, the ratio of people using smartphones among mobile phone subscribers reached 84 percent in 2017, up from 78 percent the previous year, according to the 2017 Nielsen Vietnam Smartphone Insights Report.

    Online sales in Vietnam have expanded rapidly in recent years, currently accounting for 3.39 percent of the country’s retail market. The total retail market grew 10.9 percent last year to $173.27 billion, as reported.

  • Vietnam’s VCCI shared 3 solutions to resolve businesses’ credit crunch

    Vietnam’s VCCI shared 3 solutions to resolve businesses’ credit crunch

    A recent survey found that 217 out of 504 questioned businesses in various sectors could not get bank loans for lack of collateral.

    The survey was done last May for the “Assisting Vietnamese businesses with increased access to credit through improving governance and financial transparency” project of the Vietnam Chamber of Commerce and Industry (VCCI).

    Releasing the survey results last month, the VCCI said businesses have difficulty proving their creditworthiness to banks and other credit institutions.

    Nguyen Thi Mui, an economist, acknowledging the need to provide banks with collateral for loans, also pointed out that only a small proportion of businesses can fully meet banks’ requirements.

    The Government and the State Bank of Vietnam have in the past tried various programs to ease credit access but with no great success.

    The VCCI has three possible solutions but stressed banks have a major role in remedying the problem.

    Firstly, bank staff should devote time and effort to assist customers seeking loans. More importantly, banks should fully understand the challenges that businesses face.

    They should be able to detect whether or not investing in this business would benefit them in the long run. If so, the bank should help loan takers overcome the current finance problem.

    It said banks should adjust their risk appraisal methods to better serve small and medium-sized enterprises. A large part of Vietnamese banks’ income comes from interest on loans to businesses, it said.

    Secondly, the VCCI said, banks’ current interest rates do not only fit the nation’s current economic situation but also affects businesses’ competitiveness. It recommends that banks should narrow the gap between their deposit lending interest rates to two percent.

    Lastly, the VCCI said, businesses should look to improve themselves in terms of human resources and management to appeal more in front of lenders.

    According to the General Statistics Office (GSO), Vietnam had more than 600,000 enterprises at the end of last year, 95 percent of them small and medium-sized enterprises with an annual turnover of less than VND100 billion ($4.3 million).

    The number of enterprises with turnovers less than VND20 billion makes up over 70 percent of the total number of small and medium enterprises. VCCI statistics show that nearly 60 percent of these micro enterprises did not succeed in getting bank loans in 2016.

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  • Vietnam’s Vinalines raises fraction of target in IPO

    Vietnam’s Vinalines raises fraction of target in IPO

    Vietnam National Shipping Lines, a state-owned shipping firm, raised VND54.3 billion ($2.33 million) from an initial public offering (IPO) on Wednesday.

    The figure was far below its target of VND4.89 trillion, the Hanoi Stock Exchange said on Wednesday.

    The company, better known as Vinalines, sold 5.43 million shares or only 1.11 percent of the shares offered at the IPO at an average price of VND10,002 apiece.

    Vinalines sold the shares to 39 individual investors and two corporate investors. Foreign investors bought 6,200 shares.

    Last month, bookrunner Saigon Securities Inc had said that Vinalines was seeking to raise around $210 million from the sale of 488.82 million shares, or a 34.8 percent stake, at the IPO.

    $1 = 23,313 dong

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  • Phuong Nam makes distress sale of stakes in CGV cinemas

    Phuong Nam makes distress sale of stakes in CGV cinemas

    Phuong Nam Culture Joint Stock Co. planned to sell its remaining 7.5 percent stake in Vietnam’s largest cinema chain, CGV.

    The firm said the sale would be worth for VND101 billion ($4.5 million).

    In June the Vietnamese private firm had sold a 12.5 percent stake to realty firm Kim Cuong Den JSC for VND160 billion ($7.1 million).

    Thus, while the total of VND261 billion is almost nine times what the company had paid to acquire the 20 percent stake (VND30 billion in 2004), it values the chain at just half the price Korea’s CJ Group did when buying Megastar, formerly CGV, seven years ago.

    Phuong Nam’s sale values the chain, which has a 47 percent market share of Vietnam’s cinema industry, at $56 million while the CJ transaction had valued it at $100 million.

    With 53 cinemas, CGV reported revenues of VND2.6 trillion ($115 million) and after-tax profit of VND107 billion ($4.75 million) last year.

    Insiders said the fire sale was due to the financial distress PNC has faced for several years, and the money would help it pay off its debts.

    At the end of the second quarter this year PNC’s liabilities had amounted to VND548.7 billion ($23.54 million), or 93 per cent of its capital.

    It has accumulated losses of more than VND98.3 billion ($4.22 million).

    Established in 1982 in HCMC, PNC has interests in the film (Phuong Nam Film Studio), printing (Phuong Nam Printing Factory) and publishing (Phuong Nam Book) industries. It also has investment in stationery and gift retailing.

    Shares of the company, listed on the Ho Chi Minh Stock Exchange (HOSE), are currently under special control for reporting losses for two consecutive years.

    It will probably be forced to delist if losses exceed owner’s equity.

    On August 30 PNC shares closed at VND13,800 ($0.6) per unit.

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  • Vietnam stocks achieve relative calm after turbulent Q2

    Vietnam stocks achieve relative calm after turbulent Q2

    The volatility seems to have ended in the Vietnamese stock market, and it has been rising for several weeks now.

    The 30-day volatility in the benchmark VN-Index at the Ho Chi Minh Stock Exchange (HOSE) has fallen to the lowest level since last November.

    The economic turbulence of the past few months “is over” with the prospect of an escalating trade war encompassing Vietnam becoming more “remote,” said Michel Tosto, head of institutional sales and brokerage at Viet Capital Securities, as saying.

    Inflation is expected to be contained and the currency has become more stable, he added.

    “All this has brought a sense of calm to the market, and investor focus is again on earnings, which look solid for most companies,” he said. “Valuations are much more reasonable now, compared to the mid-March high.”

    The benchmark VN-Index has rebounded over 10 percent from its July low. The gauge had plunged 18.19 percent in the second quarter of this year, making Vietnam the worst-performing market in the world.

    It also marked the worst period for the market since the fourth quarter of 2008, when an economic crisis shook the world, including Vietnam.

    But in the first three months of this year the VN-Index had risen 19.33 percent, the best performance by any market globally. It crossed the 1,200-point mark on April 9.

    Then the fall occurred and has been struggling in the 900s since then.

    In the last trading session of 2017, the stock market had hit a 10-year high, reaching 984.24 points. It had not broken the 800-point barrier since 2008.

    In March, experts said the market was low-risk and investors were high on growth confidence.

    Nguyen The Minh, a senior analyst at Saigon Securities Incorporation, had said then that “the VN-Index could reach 1,050 points in the short-term and 1,300 by the year’s end.”

    RongViet Securities Corporation said the VN-Index will increase by at least 17 percent this year – 67 percent in a best-case scenario – meaning it could end the year somewhere between 1,170 and 1,640.

    On Tuesday, the VN-Index dropped 13.6 points, or 1.37 percent, to around 975.

    Despite its expectations of a short-term market boost, the Bao Viet Securities Company (BVSC) said that it could drop further around 970-975 points.  In such a scenario, BVSC analysts said it would more difficult for the market to bounce back.

  • Uniqlo to open in Vietnam next year

    Uniqlo to open in Vietnam next year

    Uniqlo Vietnam will launch next year.

    The Japanese fast-fashion brand says it will open its first store in Ho Chi Minh City in the second quarter of next year, with the exact location to be advised later.

    The Uniqlo Vietnam launch announcement follows successful debuts in the fast-growing market by archrivals H&M from Sweden and Spanish-headquartered Zara during the last two years.

    “Our entry into Vietnam is an exciting milestone for everyone at Uniqlo,” said Tadashi Yanai, chairman, president and CEO of Uniqlo’s parent Fast Retailing.

    “The Southeast Asia region has been an important driver of growth for us, and we are pleased and optimistic about our opportunity to be a part of such an exciting economy and retail market,” he said

    Uniqlo will begin recruiting local talent soon in preparation for the opening of its first store.

    Uniqlo Vietnam will be a joint venture 75 per cent owned by its Singapore subsidiary and 25 per cent by Mitsubishi Corporation, with no local shareholding.

    With the first Uniqlo Vietnam store located in Ho Chi Minh City, the company says it will focus on establishing its presence and brand awareness there before considering other cities.

  • Vietnam eyes $2.4 bln upgrade to all civilian airports

    Vietnam eyes $2.4 bln upgrade to all civilian airports

    Vietnam’s airport operator has recommended a VND56.7 trillion ($2.4 billion) upgrade of 16 of the 21 civilian airports in the country.

    The Airports Corporation of Vietnam (ACV) wants to renovate Tan Son Nhat Airport in Ho Chi Minh City, Noi Bai in Hanoi; Da Nang, Chu Lai, Cat Bi, Phu Bai, Dong Hoi, Cam Ranh, Tuy Hoa, and Vinh airports in central Vietnam; Phu Quoc and Con Dao airports on the two southern islands; Lien Khuong Airport in the Central Highlands; and Dien Bien, Na San and Lao Cai airports in the northern region.

    The ACV said it would use internal resources for the upgrade in a proposal submitted to the Ministry of Transport for the development of aviation infrastructure from now through 2021.

    It expected the number of passengers to grow by 10 percent a year to around 137 million by 2021.

    By 2025 the figure is forecast to reach 185 million.

    Head of the Civil Aviation Authority of Vietnam (CAAV), Dinh Viet Thang, agreed with the projections.

    ACV runs all the civilian airports in the country.

    It is now the main investor of the proposed Long Thanh International Airport in the southern province of Dong Nai near HCMC.

    Long Thanh will be built in three phases over three decades. The VND92.1 trillion (over $4 billion) first part is scheduled for completion in 2025, when it will handle 25 million passengers a year.

    Flying into the future: Check-in at Vietnam's planned largest airport 

    It is expected to be fully finished in 2050.

    Once completed Long Thanh is expected to replace Tan Son Nhat as the largest airport in Vietnam.

    Tan Son Nhat currently handles 32 million passengers a year, far above its designed capacity of 25 million.

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  • No fuel tax hike before 2020, minister assures

    No fuel tax hike before 2020, minister assures

    Vietnam won’t increase its fuel tax before 2020, Finance Minister Dinh Tien Dung has directed.

    Dung has ordered a proposal to increase environmental tax on petrol and diesel to be removed from next year’s plan.

    Earlier this year, the ministry had proposed that the environmental tax on petrol and diesel be increased by 33 percent, or VND4,000 (17 cents) per liter for petrol and VND2,000 per liter for diesel.

    The proposed hike, the highest permitted in Vietnam, was met with strong public opposition.

    But the ministry had defended its proposal by saying that the tax can bring VND57.3 trillion ($2.4 billion) each year to state coffers, an annual increase of VND15.7 trillion ($650 million) from current collections.

    Last month, top legislator Nguyen Thi Kim Ngan approved the delay after listening to experts’ say that the tax will affect Vietnam’s goal of containing inflation below four percent this year.

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